From Digital Transformation to busting bureaucracy

Digital transformation can mean different things. Some people will focus on customer experience but most of all it’s, for a business, acquiring the capabilities to operate at speed and scale on markets that move and transform fast. Customer and employee experience are means to this end.

This kind of structure has a name : bureaucracy. And it was the theme of Gary Hamel‘s keynote at HRTechWorld 2016.

Startups are where talents flourish

According to Hamel, today, talents have a preference for startups. No because it’s fun or any similar reason but because it’s where they flourish and can give the best of themselves. It may be a matter of culture but it’s above all a matter of structure (even if the first has an impact on the second).

Startups are bold, open, flat, lean, simple and free. On the contrary , most of large businesses put their employees in a work environment that is exactly the opposite.

How many of you can agree with the following statements ?

I’m more likely to think that for 95% of us, the following ones are more relevant.

Before going further, I’d like to make two things clear.

• I’m not saying that “old” businesses are wrong and that startups get everything right. The truth is more complex : all large structures have been small at their beginning, agile, innovative. Over time they grew, had to structure, become manageable despite of their size, comply with what investors and markets expect in terms of governance. They became naturally fat even without being conscious and they’re the first to acknowledge that. And I guess that many startups we’re mentioning as examples today will follow the same path.

• As Hamel says, unicorns, that are a model for many, represent with their cumulated $400 billions valuation in the US only very small part of the overall capitalization (2%..).

Hence the logical conclusion : the point is not to create entrepreneurial enclaves but to spread this culture into existing organizations.

Bureaucracy kills engagement and efficiency

So bureaucracy is a disease that protects the organization against transformative cells and is a burden in day-to-day operations.

With, as we know, an impact on engagement.

However, other models are possible and Hamel mentions a bunch of well-known examples.

• Hayer that operates 4 000 businesses with only three levels of hierarchy, relying on platforms, autonomy, venture-capitalism to co-fund initiatives and share the benefits with investors.

Nothing new here. Hamel is still in the trend of his latest book that he reuses year after yer with a different angle. He’s like famous chefs : he has his signature meals and serves them again and again but it’s always well served and dressed.

More interesting, Hamel started two concrete initiatives to kill bureaucracy ;

Right now, he considers that bureaucracy would cost 3 trillions dollars to the US economy and 9 at the scale of the OECD.

Is it possible to digitize a bureaucratic organization

That’s all for the Hamel Show. Now, let’s try to go beyond marketed buzzwords and try to make the idea “land”. Inspiration is necessary but execution is what people expect.

As a matter of fact, the point is neither new nor difficult to sell : everyone has been aware of that for decades, starting with Peter Drucker 40 years ago.

Can enterprise digitization help ? I don’t think so anymore. Unbureaucratization is a prerequisite to digital transformation, not the consequence. There may be a chicken and egg effect but to transform in an acceptable amount of time something more radical is needed. My own definition of digital transformation is that it is a simplification process...what leads to Hamel’s conclusions.